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Shedding light on TPPA questions at budget estimates

Submitted by Ellen Broad on 05 June 2012

Last week during budget estimates, Australia’s Department of Foreign Affairs and Trade answered questions on the Trans-Pacific Partnership Agreement.

The exchange between Greens Senator Scott Ludlam and Australia’s chief negotiator for the TPPA, Hamish McCormick is available on ParlInfo here (from page 80) and has been extracted on Senator Ludlam’s website. We’ve had a look at the Senator’s line of questioning and DFAT’s responses in further detail below.

DFAT were asked to provide details of expenditure related to Australia’s participation in the TPPA. In 2010, the Productivity Commission noted in their research report, Bilateral and Regional Trade Agreements, that ‘no useful information is publically available regarding the staffing and other costs incurred by DFAT in pursuing bilateral and regional trade agreements’ (Chapter 7). The Productivity Commission recommended (Recommendation 7) that in future,

‘To enhance transparency and public accountability and enable better decision making regarding the negotiation of trade agreements, the Department of Foreign Affairs and Trade should publish estimates of the expenditure incurred in negotiating bilateral and regional trade agreements and multilateral trade agreements. These should include estimates for the costs of negotiating recent agreements.’

In the Government’s response to the Productivity Commission’s report in 2011, they agreed with this recommendation. DFAT took Senator Ludlam’s question on notice, and we should be provided with estimates of TPP expenditure in the near future. The question did get us thinking, however, about whether estimates of the costs of negotiating the Anti-Counterfeiting Trade Agreement (ACTA) between 2008 – 2010 are publically available. We’ve tried searching Department financial reports and previous estimates hearings, but haven’t been able to track any down. If there’s anyone who knows whether they’ve been published by DFAT per the Productivity Commission’s recommendation, please let us know!

DFAT confirmed that no modeling has been undertaken in the TPPA in an attempt to quantify the economic benefits for Australia. This is in line with the Gillard Government’s Trade Policy Statement, released in April last year, which explicitly rejected the Productivity Commission’s recommendation that independent quantitative analysis and modeling be a part of future trade negotiations. Interestingly, the Government nonetheless agreed with recommendation 4 of the Productivity Commission, that matters in trade agreements that serve to increase barriers to trade should be avoided. Recommendation 4 goes on to say that

‘IP provisionsshould only be included in cases where a rigorous economic analysis shows that the provisions would likely generate overall net benefits for the agreement partners.’

The Trans-Pacific Partnership Agreement includes a detailed IP chapter, predominantly focused on enforcement and protection of rights. The Government did not address this aspect of Recommendation 4 in their response to the Productivity Commission, and has not yet undertaken economic analysis of proposed TPPA IP provisions.

Senator Ludlam queried statements made by emerging economic superpowers like India, Brazil and China in opposition to the TPPA . India delivered an intervention at the WTO TRIPS Council on 25 October 2011, raising detailed and systematic concerns with the ACTA and the TPPA for developing and in transition countries. They cited remarks made by other countries, including Brazil, in past TRIPS Council meetings, that agreements like ACTA and the TPPA which include TRIPS+ provisions ‘disturb the fine balance of rights and obligations provided in the TRIPS agreement and negate the decisions like the Doha Declaration on Public Health’.

As for China, it remains highly unlikely that they could join the Trans-Pacific Partnership while it proceeds on terms set by the US. The East Asian economic partnership agreement Senator Ludlam referred to may pose a more attractive alternative to the TPPA for China, where they would have more flexibility in the standards to be adopted in relation to IP, labour and environment. Japan and India, as well as Australia, have also agreed to negotiate this 16-nation agreement and some comments indicate Japan may find it easier to pursue trade standards through this avenue over the TPPA.

Moving through the exchange, it’s probably for the best that Senator Bob Carr, the Foreign Minister and senior minister for the Department of Foreign Affairs & Trade, hasn’t seen the negotiating text for the Trans-Pacific Partnership Agreement. The only leaked draft of the IP chapter of the TPP (if legitimate) included strong parallel importation restrictions (PIRs), which Senator Carr has opposed fiercely and eloquently in the past. DFAT also wouldn’t be drawn on whether the Minister for Trade, the Hon. Craig Emerson MP has seen the negotiating texts, but emphasized that the agreement, when completed, would be over 1,000 pages long.

It’s not unusual for parties to alter or reverse their positions on issues on gaining power, but it’s worth noting that as then-Shadow Minister for Trade during negotiation of the AUSFTA in 2003, the Hon. Craig Emmerson condemned AUSFTA for its secrecy (If the US-Australia Free Trade Agreement is so Good, Why the Secrecy?, Press Release, 14 February 2003 – not online). At 1,000 pages long though, perhaps the more eyes looking over the TPPA negotiating texts, the better. Making draft texts available might enable academics, policy experts and civil society groups to support and provide insight on particular provisions for the benefit of negotiators.

Although concerns have been raised by civil society groups (in response to the leaking of the US draft IP chapter last year) that the TPPA would further restrict lawful use of content under Australian IP law, DFAT assured Senator Ludlam that Australia is not proposing any changes to our domestic IP system. Although DFAT would not comment on the substance of the TPPA IP text, intelligence (behind paywall) from the last round of negotiations suggests that ACTA-style language is being proposed for IP enforcement provisions of the TPP. And while DFAT have been frustrated by the myths and rumours surrounding negotiation of both ACTA and the TPPA, without access to the negotiating texts, and with the Department unable to engage with stakeholder concerns and questions under the terms of their confidentiality agreement, myths and rumours are what we will have to go on.